Introduction to Nigeria’s Economic Future
The Governor of the Central Bank of Nigeria, Mr. Olayemi Cardoso, has given hints that lending rates may decline in the coming months. This is due to the fact that inflation continues to ease, which raises hopes for improved access to credit and stronger investment flows. Cardoso gave this indication at the European Business Chamber (Eurocham Nigeria) C-Level Forum in Lagos.
Current Economic State
The Central Bank of Nigeria (CBN) has been working towards macroeconomic stability and a stronger banking sector. The bank’s goal is to position Nigeria as a top investment destination. According to Cardoso, headline inflation, though still high, has begun to slow down. This creates the possibility of lower lending rates once price stability is further consolidated.
Impact of Interest Rates
High lending rates have weighed heavily on businesses in Nigeria. However, the CBN’s priority has been to restore confidence and strengthen the system’s resilience. Cardoso stated that there is substantial potential for interest rates to decrease in the future as inflation continues to decline. He believes that this will lead to stronger corporate lending and higher levels of investment.
Bank Recapitalization
The ongoing bank recapitalization exercise is critical for safeguarding the financial system. The new minimum capital requirements will produce stronger institutions capable of withstanding shocks and financing broader economic growth. Technology-driven solutions and the deepening of financial inclusion are also key priorities for the bank.
Financial Inclusion and Poverty Reduction
Expanding access to fintech platforms and supporting innovation will play a central role in tackling poverty and bridging financing gaps. The CBN is committed to improving coordination with the fiscal authorities, which will enable the country to sustain reforms and achieve long-term stability.
Nigeria’s Global Position
Nigeria’s size and strategic location give it a unique role to play in West Africa and beyond. The country is a large and appealing market, and it is also situated at the entrance to the broader continent and West Africa. This underscores the importance of maintaining stability at home.
European Business Chamber’s Role
The European Business Chamber (Eurocham Nigeria) is committed to long-term partnerships in Nigeria, with a focus on job creation and sustainable investment. The chamber’s president, Yann Gilbert, praised the forum as an important platform for dialogue between European businesses and Nigerian policymakers.
Monetary Policy Rate
The CBN raised its benchmark lending rate six times in 2024, pushing the Monetary Policy Rate from 18.75 percent at the start of the year to 27.50 percent by December. However, 2025 has marked a pause in the tightening cycle, with the rate remaining unchanged at 27.50 percent.
Business Expectations
Businesses across Nigeria have ranked high interest rates as the most severe constraint affecting their operations. The CBN’s June 2025 Business Expectations Survey found that high interest rates scored 75.6 on the constraint index, followed by insecurity and insufficient power supply.
Conclusion
In conclusion, the Central Bank of Nigeria is working towards reducing lending rates in the coming months. This is due to the easing of inflation and the bank’s commitment to macroeconomic stability. The CBN’s efforts to strengthen the banking sector, improve financial inclusion, and reduce poverty will play a crucial role in Nigeria’s economic future. As the bank prepares for its next Monetary Policy Committee meeting, market watchers are looking for signals on whether the regulator will maintain its pause or begin to ease policy.
